Bolder Thinking Blog

[Series] Big tech ecosystem strategies: Implications and predictions for brands and marketers (Part 2)

May 4th, 2021 | Behice Ilhan

Apple recently released one of its most anticipated software updates, App Tracking Transparency, which gives more control to Apple users over how their data is shared. Apple grounded this contentious decision within the company’s narrative of a commitment to privacy. Around the same time, Spotify announced its “Hey Spotify” feature. Many interpreted this addition as the final launch of another voice-command experience that was in the works since early 2019.

Analyzing these two seemingly disparate launches, and connecting the dots with some other recent news, reveals:

  1. The evolving ecosystem strategies adopted, maintained, and sustained by big tech companies like Amazon, Google, and Apple.
  2. The countermove strategies and tactics devised and executed by the content platforms like Spotify, Roku, or Epic Games against these ecosystem strategies of the big tech.

In part one of this series, we took a comprehensive look at funnel strategies adopted by big tech ecosystems and evaluate the countermove strategies and tactics against them. Read on for analysis of what it all means for competitors and the wider marketing/advertising industry.

Are the floodgates open?

Will these content platforms or House of Brands be the only ones to execute countermoves – via legal means or mobilizing consumers – against these ecosystems? No. We will see more disintermediation moves – like Spotify or Epic Games – that will try to sustain direct consumer touchpoints. But what does a widely adopted disintermediation mean for consumers? How many Siris or Alexas will consumers want to engage with? Or, will they go to, for example, Unilever’s Mila search engine to specifically search for beauty products?

Is it too late?

Is it too late for these countermoves? Maybe. Controlling the top of the funnel and/or accessing the various biometric data are not enough to create ambient multimodal consumer experiences or design consumer habits/routines. Voice control, or the data from that touchpoint, for example, will not be enough for Spotify to design coherent and personalized music consumption experiences in a smart home. Spotify will still need other data from Apple to understand consumer preferences, rely on Alexa to integrate that experience into home-based routines, such as dimming the lights for the mood, and/or depend on a pair of Apple Airpods to deliver that content.

These tech ecosystems derive their power and influence not necessarily from a single touchpoint; rather their power is firmly grounded in the effective and holistic uses of cloud computing, machine learning, and AI across stacked hardware, software, and platforms – or experience systems.

What is the future of the ecosystem strategy?

Most big tech ecosystems are built around the home, establishing the home as a smarter system. The next stage for cocooning and platformitization will be cars – creating an ecosystem within and around the car. We see early observations that reveal how cars will be one of the hubs of smart technology, rather than an extension of smart home systems. In March 2021, SpaceX filed an application with the Federal Communications Commission (FCC) requesting to beam its Starlink internet to vehicles, not just homes. Spotify has launched its Spotify-only, voice-controlled device for the car, Car Thing to limited users in the US to control the music consumption experience in the car. This also allows Spotify to be close to the consumer data rather than being veiled by another ecosystem like Tesla, Apple or Amazon. For many consumers, the car, especially as a result of the pandemic, has become a safe, clean place that holds new meaning and hosts new marketplaces like curbside pickups and trunk delivery.

What does it mean for competitors and the advertising industry?

These new dynamics are creating unique challenges for House of Brands and content platform marketers, but also opening up new possibilities for platform ecosystems like Apple, Amazon and Google. The existing big tech ecosystems are making aggressive moves to sustain their power and to control monetization models and advertising revenues. Although Apple emphasizes the privacy concerns to explain its recent App Tracking Transparency move, the update also enables Apple to contain ad revenues within its own ecosystem; thus, getting the most out of the billion-dollar ad game where Facebook, Google and Amazon are major players. The fact that this particular update is causing a big dispute between Facebook and Apple due to Facebook’s concern about the future of its own ad business – Facebook encouraged its iOS 14.5 users to enable tracking so its apps remain ‘free of charge’ – reveals where the real battlefield is being waged. This is not about privacy. It is positioned as such due to the sensitivities and faultlines in the Zeitgeist. But, let’s be clear, this is a battle over advertising dollars.

Behice Ilhan

Behice Ilhan

Dr. Behice Ece Ilhan is the Senior Trend Strategist at Mintel. Behice provides futuristic perspectives and opinions on trends and their impact on the brand landscape, which she utilizes to strengthen engagement with CPG and agency clients on storytelling and positioning strategies.